Raymond James' Chief Investment Officer Is Calling An End To The 'Trump Rally'

Trump rally" has come to an end and will be immediately followed by a selloff. Saut explained to CNBC on Friday that stocks will see selling pressure on Monday as a direct result of President Donald Trump and House Speaker Paul Ryan pulling the Republican health care bill prior to the vote. So far, Saut's analysis is accurate as U.S. stock futures were pointing toward a lower open, including a triple-digit decline in the Dow Jones Industrial average.

Saut has been encouraging investors to be cautious since the start of February when the S&P 500 index has been "trapped" in a trading range. He also noted that his firm's research shows that the "smart money" is indeed hedging positions for a significant downside move of 5 to 10 percent.

'Years Left To Run'

Saut isn't sounding the alarm bells just yet. He explained that stock market cycles can run at least 14–16 years and the current cycle started only in 2009. He added that since we are only in year eight of the cycle there are "years left to run."

"I would also note that we have transitioned in our opinion from an interest rate secular bull market where interest rates come down and price earnings multiples expand to an earnings driven secular bull market," he added.

Finally, Saut suggested that investors hold technology, financial and energy stocks and shouldn't be overly defensive in the near term.

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Pro: The Trump Rally May Have Come To An End Was The 'Trump Rally' Really Any Different From The Bush Or Clinton Rallies? ________ Image Credit: "President Donald Trump shares a laugh with (clockwise from left) Ms. Seema Verma, Administrator of the Centers for Medicare and Medicaid Services, Secretary Tom Price, U.S. Secretary of Health and Human Services, and Vice President Mike Pence on Tuesday, March 14, 2017, in the Oval Office of the White House. Ms. Verma was sworn in as the Administrator earlier in the afternoon by Vice President Pence." By Shealah Craighead - Photo of the Day: March 15, 2017 on whitehouse.gov, Public Domain, via Wikimedia Commons